Why Traders Are So Bullish on BlackBerry

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July 9 (Bloomberg) -- KeeneOnTheMarket.com's Andrew Keene and Trading Advantage's Alan Knuckman discuss their option plays for BlackBerry on Bloomberg Television's "Lunch Money." (Source: Bloomberg)

And why is this that traders are seeing insomuch that everything the company says?

It is a big decline.

I am looking for some key support at the eight dollar level.

That was the november by cap.

I want to lean on that level.

I want to be a buyer near eight dollars in blackberry.

The reward is greater than the risk at these levels.

That is one side of things.

Andrew, you are not as optimistic on some of these parts of blackberry.

No, i think he does go higher between now and the end of the year.

It went from $18 to nine dollars.

I think the floor is around six dollars.

$5.70 a share in cash.

We have seen this before in hp cue, best buy.

I thought both those countries were going out of business.

There is upside potential for blackberry but i want to define my risk versus reward.

My trade is simple -- bull calls in january, 2 earnings catalysts in there.

January 10, 15 ball calls, do this for about a dollar food -- do this for about a dollar.

I don't want to be selling puts in the same because it hasn't bruised so badly.


He doesn't want to sell puts trade.

I do.

I would put in the price to buy it at eight dollars or i would sell the 9 put.

39 days left until expiration.

My basis is a dollars $.50. that is 11% lower than what we are here.

I could sell cover calls against it if i choose.

I am using the put-selling strategy as a way to get in at a level i am comfortable with.

$830 is my mask some risk -- i look at my risk versus reward set up and i'm looking at a 4-1 set up.

Alan is trying to make -- i just made $.40. five percent return under my risk -- and i can get 400 -- you can, but you need a big, big move.

Let's bring in another voice.

Michael purves, you have been with us the entire hour.

On blackberry, this is interesting to look that matches because of the drama playing playing out but because of the price dynamic.

How would you be playing this particular name?

This stock is an option itself -- what do you mean?

It has a fair amount of binary outcome over the long term.

This is not something you put in your pa and forget about for 10, the way you might with exxon mobil.

How would you play it?

I am partial to the bull call spread.

The imply levels were not very expensive.

Relative to how they have been trading, selling puts on this kind of stock makes me nervous.

Andrew, you first.

He likes the call spread.

With your two views, why is it that the call spread does or doesn't work?

I talk about this a lot.

I don't like names that are down.

You can only make $.40 on the trade but you are risking $860 to only make $40. i don't want to own the stock.

It can go lower to the 60 level and then they puts would be three dollars.

I can write another option for the next one and write another option for the next one.

It is a way to get into a stock i want to own and a lower price and you mentioned the option.

It is priced like an option because it is nine dollars right now but what is the downside for nine dollars?

Not going to zero most likely.

It is not going to zero, in my estimation.


Thank you so much for bringing us those views on blackberry,

This text has been automatically generated. It may not be 100% accurate.


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